IRS Has Just Issued Revenue Procedure 2020

HSA Limits Released for 2021  May 21, 2020 IRS has just issued Revenue Procedure 2020-32, which provides the 2021 cost-of-living contribution and coverage adjustments for HSAs, as required under Code Section 223(g).  Many items have increased for 2021.  Annual HSA Contribution Amounts 2020      2021        Coverage Levels $3,550   $3,600   Individual  $7,100   $7,200   Family $1,000   $1,000   Catch-up  Annual Maximum Out-Of-Pocket Limits for HDHP 2020   2021    Coverage Levels $6,900   $7,000  Individual $13,800 $14,000 Family  Annual Minimum Deductible Amount Limits for HDHP 2020  2021    Coverage Levels $1,400  $1,400 Individual $2,800   $2,800  Family For a copy of Revenue Procedure 2020-32 below:  Rev. Proc. 2020-32 SECTION 1. PURPOSE This revenue procedure provides the 2021 inflation adjusted amounts for Health Savings Accounts (HSAs) as determined under § 223 of the Internal Revenue Code. SECTION 2. 2021 INFLATION ADJUSTED ITEMS Annual contribution limitation. For calendar year 2021, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,600. For calendar year 2021, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,200. High deductible health plan. For calendar year 2021, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,000 for self-only coverage or $14,000 for family coverage. SECTION 3. EFFECTIVE DATE This revenue procedure is effective for calendar year 2021. SECTION 4. DRAFTING INFORMATION The principal author of this revenue procedure is Bill Ruane of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information regarding § 223 of the Code and HSAs, contact William Fischer at (202) 317-5500 (not a toll-free number). For further information regarding the calculation of the inflation adjustments in this revenue procedure, contact Mr. Ruane at (202) 317-4718 (not a toll-free number). If you have any comments or questions regarding any of the above information, please do not hesitate to call me at (708) 717-9638 or e-mail me at larry@larrygrudzien.com Thank-You, Larry Grudzien Attorney-At-Law